Brand Recognition Drives Diner Preference, Restaurant Sales

When deciding between restaurants, most consumers are not looking to chance it with an unknown entity. Research from the March/April edition of PYMNTS’ Digital Divide series, The Digital Divide: Regional Variations In US Food Ordering Trends And Digital Adoption, found that the majority of consumers take into account familiarity with the restaurant’s name when weighing their options.

Read more: New Research Shows That Regional Dining Quirks Matter In Tailoring Restaurant Offers

The study, created in collaboration with Software-as-a-Service customer experience management solutions provider Paytronix, which drew from a survey of more than 2,500 United States adults conducted in February, found that 54% consider familiarity when choosing a full-service restaurant (FSR), and 51% do so when choosing a quick-service restaurant (QSR).

The power of name recognition to drive purchases has led to a new restaurant model that has grown significantly in the past couple of years, a model whereby a known brand licenses its name and menu to another restaurant, which then prepares the brand’s food in its kitchen and sells it on digital platforms under the brand’s name.

In an interview with PYMNTS’ Karen Webster, Andrew Robbins, CEO of Paytronix, highlighted the example of casual dining chain TGI Fridays, for which name recognition significantly exceeds availability.

“TGI Fridays had as something like 94% consumer awareness — consumers know the brand,” he said. “But something like only 20% of people can go to a TGI Fridays. That’s 74% that they’re missing on because of physical constraints.”

See also: Labor Challenges Stifling Would-Be Restaurant Boom, Paytronix CEO Says

In cases such as these, both the host kitchen and the name brand generate additional revenue, and the name brand also is able to establish its presence in new areas and potentially test those markets for new physical locations.

There are significant regional differences, not only in how name-motivated restaurant customers are, but in the kinds of restaurants for which they care about name recognition. For instance, consumers in the Pacific region of the United States (California, Oregon, Washington, Alaska and Hawaii) are the least likely to care when it comes to FSRs, with only 48% taking the factor into account. However, they are the most likely to care when it comes to QSRs, with 61% reporting that they consider familiarity with the restaurant’s name when deliberating.

Conversely, QSRs with minimal name recognition have the best shot in the Northeast (Maine, New Hampshire, Vermont, Massachusetts, Connecticut, Rhode Island, New York, Pennsylvania and New Jersey), where only 47% of consumers care.

Ultimately, the single factor that goes the longest way towards motivating consumers to make a purchase is the taste of the food, with the greatest share of consumers across restaurants ranking this as a factor they consider for both FSRs and QSRs. Still, consumers cannot be motivated by the taste of a given restaurant’s food if they have never tried that food, and name recognition can be that draw needed to get consumers through the door (or the virtual entry point) that first time.